Buyer won't give up on AngloGold

optionMONSTER

AngloGold Ashanti has lost more than 60 percent of its market value in the last year, but one large trader is still hoping for a rally.

optionMONSTER's Heat Seeker system detected the purchase of 4,936 January 16 calls for $0.60 in less than 4 minutes yesterday. This is clearly a new position, as open interest in the strike was 1,140 contracts before the trade appeared.

These long calls lock in the price where the stock can be purchased through mid-January no matter how far it might climb. They could be sold earlier at a profit if premiums rise with a rally before then, but the contracts will expire worthless if shares remain below the $16 strike price. (See our Education section)

AU fell 3.01 percent yesterday to close at $12.88. The South African gold miner, which was trading above $34 last fall, hit an all-time low of $11.62 on Aug. 7 and has been range-bound mostly between $12 and $15 since.

Total option volume in the name yesterday was more than triple its daily average for the last month. Overall calls outnumbered puts by a bullish 11-to-1 ratio.

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